50 Research-Based Tips to Save on Car Insurance


how to save on car insurance
11 min read

Finding the right car insurance can be frustrating and complex — no thanks to varying state coverage requirements and overhyped advertising. We at The Zebra have been working hard to bring transparency to the world of car insurance. With our brand new State of Auto Insurance Report, we’re able to provide tips (we’re talking data-verified tips!) to help consumers make the process easier. Here are 50 of our best tips to save on car insurance:

How to Save on Car Insurance:

  1. Purchase your policy at least 10 days before you need it activated for a better rate. This is especially helpful if you know your policy is coming up for renewal and you want to switch to a new company. Average savings are $43 per year, but can be hundreds.
  2. Don’t let your insurance coverage lapse. Even after being insured for just one year, rates drop 7.7%.
  3. Don’t drink and drive. In addition to legal fees and other costly expenses, a DUI/DWI increases auto insurance premiums by 80% on average. A sober ride home is beneficial to your wallet and everyone else on the road!
  4. If moving to a new state — or even a new zip code — make sure to shop for a new policy. The most expensive state for insurance (Michigan) is almost three times as expensive as the least (Ohio), so you could be in for huge savings depending on the state you’re leaving (or increases, so make sure you’re informed). (See where all states rank here.)
  5. Pay in full up front for your policy. Drivers save an average of $62 per year by paying in full rather than an installment plan.
  6. Drivers who increase their credit score by one tier save an average of 17% off their annual premium.
  7. Increasing your credit score from the Poor to the Excellent range can save 53% (nearly $1,300) on rates.
  8. Bundle your auto policy with homeowners insurance and you could save $110 per year or more.
  9. Even if you are a renter, bundling renters insurance with auto can save drivers 5.5% on average. This comes out to an average savings of $72 per year!
  10. Take a few minutes to learn about which companies, minimum coverage requirements, and other factors apply to your state.
  11. Watch that speed limit! A ticket for speeding increases your rates an average of 20-30% for up to three years from the date of the ticket.
  12. Buy an older car. A 5-year-old version of a certain model is nearly 13% less expensive to insure than its current model year version.
  13. Maintain continuous coverage and shop around for a new policy every 6 months (and especially after 1, 3, and 5 years of being insured) to see if a new insurance company or policy fits you better — you could save hundreds.
  14. Provide your VIN when getting quotes. Most new vehicles come with factory alarms so giving your VIN might help you qualify for an anti-theft device discount.
  15. Drive safely! While this is a good idea for your own well-being and that of others around you, of course, you’ll also save yourself from a minimum 40% increase in rates that your state’s most costly violation (often DUI or racing) would incur.
  16. Not all car insurance companies are created equal. They have unique business models designed to serve certain types of drivers who pose different levels of risk. Make sure to find the right fit for your needs and behaviors.
  17. Compare car insurance quotes to make sure you’re considering all rating factors and companies applicable to your unique needs.
  18. Agreeing to go paperless and sign your policy documents electronically can lead to discounts, so don’t be afraid to provide a valid email address when buying a new policy.
  19. Listing your highest level of education can lead to a lower rate since many companies use it as a rating factor and even offer discounts for college grads. Check the answer to that question on your policy; you could be leaving money on the table!
  20. When shopping for car insurance, don’t just factor in price. Getting the right coverage from a reliable insurance company can keep you from paying big in the event of a collision or other incident.
  21. Get married! Kidding — we do not endorse tying the knot just for car insurance benefits. But it’s good to know that, in many states, being married and covered with a spouse saves drivers 5.6% on their policies.
  22. Consider telematicsif you live close to work and are a safe, low-mileage driver, that is. The devices can save drivers up to 30%, though average savings are under $10 per year.
  23. Sign up for autopay or electronic funds transfer (EFT) instead of receiving a bill. Drivers save $28/year on average.
  24. Have you been listed as a driver on someone else’s policy for at least 6 months? Most insurance companies will offer a discount on your own separate policy.
  25. Be as honest and detailed as you can when seeking a quote. Insurance companies will run background checks on your driving record, address, and (sometimes) your credit to price your rate, and any guessing could mean your quote and final premium differ substantially.
  26. Do you share a residence with another driver? Consider combining policies to share the cost of your insurance for more savings.
  27. Have you paid off your car? If your vehicle is no longer worth much, you might want to consider removing comprehensive and collision coverage for a significant reduction in premium.
  28. Increasing your deductible from $500 to $1,000 could save you about $150 per year.
  29. If you are widowed or divorced, your marital status could help to lower your rate. Although there isn’t a huge difference in rates for divorced or widowed drivers, single drivers pay the most.
  30. Ride-sharing is a great way to earn extra money, but not all insurance policies are created equal. Make sure to check with your insurance company before you start driving for Uber or Lyft, etc. The worst time to find out your policy doesn’t cover ride-sharing is after you are involved in a crash.
  31. Be aware of national and state traffic laws! Tickets and violations affect your insurance rate for 3 years from the date of the ticket. Accidents can affect your rates for up to 5 years from the date of the accident. In California, DUIs can hurt your rate for up to 10 years from the date of the incident.
  32. Study up on insurance lingo. “15 minutes can save you…” Kidding. But really, spend some time knowing what you’re buying and make sure it actually fits your needs. There is no one-size-fits-all car insurance policy.
  33. If you drive fewer than 7,500 miles per year, your insurance company may offer a better rate — though mileage usually has a limited impact on savings.
  34. The discount for maintaining continuous insurance offered by most companies is also affected by the amount of liability coverage on your policy. The higher your limit of liability, the better your prior insurance discount will be.
  35. Stay on a parent’s policy if you can. Drivers ages 16-19 pay double or triple rates for other ages, so being listed on a parent’s or family member’s policy can help you build discounts until the need arises for your own separate policy.
  36. Everyone knows that some birthdays are more important than others and it seems like car insurance companies feel the same. We found that drivers can see significantly lower rates after their 19th, 21st, and 25th birthdays!
  37. Not to be outdone by the youngsters, we found that the category of drivers paying the lowest rates on average are between the ages of 50-59.
  38. Your commute to work is probably stressful enough without having to worry about the impact it has on the cost of your policy. Luckily, your distance to and from work has little to no impact on rates, with the exception of California, where mileage is used as a significant rating factor.
  39. The way you use your vehicle (i.e. farming, pleasure, or commuting) has a minimal impact on your rate. The exception is if you are using your car for business purposes, which raises rates 18% higher on average than any other vehicle use designation.
  40. A 2016 Honda CR-V is currently the least expensive vehicle to insure among popular cars, with an average annual premium of $1,232. (See what other cars are the least expensive to insure.)
  41. Minivans, as a whole, are less expensive to insure than any other vehicle type followed closely by SUVs. Cheers to you, soccer moms!
  42. If driving a minivan or SUV just isn’t your thing, the Chevy Cruze might be up your alley. It has the lowest average premium among popular sedans at $1,376.
  43. If trucks are more your style, the Toyota Tacoma is the least expensive pickup to insure with an average annual premium of $1,363.
  44. Are you looking for a luxury vehicle that will also allow you to have a chance at affordable car insurance? The Acura RDX is the least expensive luxury vehicle to insure at $1,429 annually.
  45. Driving a hybrid = might help you pay less at the pump, but your insurance bill is another story. We found that only luxury vehicles are more expensive to insure than “green” cars. If you do decide to go the environmentally friendly route, the Toyota Prius has the lowest average premium at $1,469.
  46. It turns out gender matters very little when it comes to car insurance pricing. The difference is less than 1% nationally between men and women.
  47. Don’t risk being left out in the rain! Add coverage to your policy at least a week before a large storm hits your area so you aren’t stuck paying for the damage yourself.
  48. Vehicle safety devices potentially help save lives, but they don’t move the needle much when it comes to lowering your insurance rate. Of all the new safety features, it seems that only Electronic Stability Control (ESC) has much of an impact on what you pay (about $5 savings per year on average. Womp womp). Still, if you’ve got ‘em, tell your insurer.
  49. Always consider auto insurance as a significant portion of the total cost of ownership of your vehicle. In fact, with lower gas prices, in many cases, insurance is the largest car-related expense after the car itself, so make sure you factor insurance into your budget and can afford your coverage.
  50. You may still qualify for a prior insurance discount if you’ve had a lapse in coverage. Most companies will give a partial discount if the lapse happened fewer than 30 days prior to the start of a new policy.

 

See The Zebra’s 2016 State of Auto Insurance Report for more car insurance trends and data by state.